The Nairobi Coffee Exchange (NCE) is the central coffee auction which is the trading floor of Kenya coffee.The Coffee Board of Kenya (currently the Coffee Directorate under AFFA) as a statutory body was established in 1934 after the enactment of the coffee industry ordinance of 1933. Since the enactment the Board was charged with the responsibility of carrying out regulation and marketing of coffee. The auctions as a mode of selling Kenyan coffee was established in 1934 and created in 1935 to enhance quality assessment through grading.

This role has changed over time through various amendments to the law to liberalize the coffee industry. In 2001, the Coffee Act Cap 333 was repealed and the Coffee Act No. 9 of 2001 enacted, establishing the Board as a statutory body under the Ministry of Agriculture, solely to regulate the coffee industry.

Before liberalization of the coffee industry the CBK (Coffee Board of Kenya) served both as a regulator and the sole marketing agent for all coffee in Kenya. At that particular time, the NCE (Nairobi Coffee Exchange), the institution established under the Coffee Rules to market coffee was run by Kenya Coffee Auctions Limited (KCA).

Upon liberalization of the industry and subsequent amendment of the Coffee Act in 2001, CBK’s core mandate changed from marketing and regulation to regulation only. The transition was not smooth since CBK and the manager/auctioneer left at the same time hence leaving the NCE without a manager. The Coffee (General) Rules were subsequently amended in the year 2002 to give an association the mandate to manage NCE. In 2006, section 62 of the rules was further amended to specify Kenya Coffee Producers and Traders Association (KCPTA) as the manager.

KCPTA was an association with its own constitution governing it under different legislation and there are no provisions under the Coffee Act and/or the Rules regulating it. Therefore, due to the inadequacy of the law, CBK was unable to undertake its mandate as the regulator of the NCE, which is one of the most important institutions in the coffee industry since this is where the trading of all the coffee in the industry (save for direct sales) is done.

Coffee (General) Rules 2002 were therefore revised in 2012, removing article 62, which had introduced KCPTA and introduced the NCE.

The Exchange is managed by a Management Committee of 9 (nine) members comprised of 5 Producers, 2 Traders, 1 Representative of Commercial Millers & Marketing Agents and 1 from the Directorate.Ownership of the Nairobi Coffee Exchange is vested in the Regulator (i.e. the Directorate) in trust for the coffee industry with an overall oversight over its operations.The operations of the NCE are financed by the participants: trade and producers through their respective marketing agents, an auction levy as determined by the Exchange Committee from time to time is charged.